KEPCO Plans Self-Rescue Measures Worth 6 Trillion Won... Selling Real Estate and Shares

[Asia Economy Sejong=Reporter Dongwoo Lee] Korea Electric Power Corporation (KEPCO), which recorded a deficit approaching 8 trillion won in the first quarter of this year, has devised a self-help plan to secure funds in the 6 trillion won range through the sale of major assets. The plan includes selling part of its stake in KEPCO Engineering & Construction, disposing of Korea Electric Vehicle Charging Service, and liquidating 25 real estate properties and its U.S. solar power business.

On the afternoon of the 18th, KEPCO held an 'Emergency Countermeasure Meeting of the Power Group' attended by the presidents of 11 subsidiaries, including power generation companies, and announced this self-help plan.

First, KEPCO decided to sell all of its equity holdings except for the minimum shares necessary to maintain public interest, securing 800 billion won. It plans to put its 400 billion won worth (14.77%) stake in KEPCO Engineering & Construction on the market and immediately sell Korea Electric Vehicle Charging Service. For unlisted subsidiaries such as KEPCO KDN, KEPCO will consult with the government to list them before proceeding with sales. Additionally, domestic special purpose companies (SPCs) will be streamlined or sold through management diagnosis.

KEPCO will also sell its real estate holdings. It plans to sell 15 KEPCO-owned properties, including the Uijeongbu substation site (worth 300 billion won), and 10 properties owned by group companies (worth 100 billion won). For currently used properties, KEPCO will resolve constraints by securing alternative facilities before additional sales, aiming to raise a total of 700 billion won.

All overseas coal power plants will be phased out. Joint ventures such as the SPC project in Cebu, Philippines, and the Boulder 3 solar power project in the U.S. are also scheduled for sale within the year. The goal of self-help efforts through overseas business restructuring is approximately 1.9 trillion won.

To reduce fuel costs, KEPCO plans to expand joint purchases of thermal coal by power generation companies and diversify sources of power generation fuel, implementing various measures to reduce electricity production costs.

Furthermore, within the scope that does not hinder safety management, KEPCO will adjust the timing of investment projects and cut operating expenses such as business promotion costs by 30%. From an organizational perspective, the workforce will be frozen until the financial situation normalizes. Similar and overlapping tasks among power group companies will be reviewed and integrated for operation.

On this day, the presidents pledged, "We have resolved to unite the capabilities of the power group companies to turn the current crisis into an opportunity to solve structural and institutional problems that have not been addressed so far."